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Technip, JGC win tender to build Russian Yamal LNG plant


A consortium including France's Technip and Japan's JGC Corporation havewon a tender to construct the Novatek-led Yamal LNG project in northernRussia, project operator Yamal LNG said in a statement Monday.

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The tender covers "engineering, procurement, supply, construction andcommissioning" of the project, which envisages three trains, with an annualliquefaction capacity of 16.5 million mt. The Technip/JGC Corporation tenderwas one of three submitted to Yamal LNG, a joint venture between Russia'slargest independent gas producer Novatek (80%) and France's Total (20%).

Novatek has not ruled out attracting new partners to the project.

"The basic terms agreed by the successful consortium are consistent withthe existing schedule for launch of the project," the statement said,providing no further details.

Yamal LNG is expected to have a first, 5.5 million mt/year LNG trainoperational by the end of 2016, to be followed by second and third trains ofsimilar capacity by the end of 2017 and 2018, respectively.

In mid-March Yamal LNG said that Russian authorities had granted theproject all the necessary permits for work on the project to begin, includingapproval of design documentation and a construction permit. A finalinvestment decision for the project has yet to be taken, but is expectedlater this year.

Financing and future supply contracts for the project are said to besubject to changes to Russian legislation covering LNG exports.

Under the current law only Gazprom has the right to export gas,including LNG. Recently, the Russian authorities have been consideringchanging the law, after Novatek requested permission to export LNG directly.It currently has an agency contract with Gazprom for exports. Novatek wantsto sign supply contracts for future exports from the project during thesecond quarter, but these agreements are subject to the legislation beingchanged.

In early February, Russian daily Izvestiya reported that the consortiumof banks that is organizing the funding for Yamal LNG plans to seek only upto $5 billion if the law is not changed, citing sources in the energyministry. If the law is amended the consortium, which comprises France'sSociete Generale, Russia's Gazprombank and Sberbank plans to seek finance ofup to $18 billion.

Yamal LNG is based on the resources of the South-Tambeiskoye field,which includes proven and probable reserves of 907 billion cubic meters ofnatural gas, as of December 31, 2012, under PRMS standards.

--Rosemary Griffin, by Jonathan Dart,